Nvidia supplier Ibiden plans to accelerate production expansion to meet AI demand

Japan's Ibiden, a major supplier of Nvidia's chip package substrates, may need to expand production to cope with growing demand.

The Japanese electronics maker's president, Koji Kawashima, was quoted as saying in a Bloomberg report Monday.

The company, which has a 112-year-old history of business, has produced artificial intelligence substrate sales are hot, and the current production has been completely snapped up by customers. Koji Kawajima, president of Ibiden, said strong demand is expected to continue at least through next year.

Ibiden is building a new substrate plant in Gifu Prefecture, central Japan, which is expected to come on line around the last quarter of 2025, initially at 25 percent capacity and reaching 50 percent capacity by March 2026. But that may not be enough, Mr. Kawajima said. The company is discussing when to bring the remaining 50% of capacity online.

"Our customers have concerns," he said in an interview. They have asked us about our next investment and capacity expansion plans."

Ibiden's customers include Intel (INTC), Advanced Micro Devices (AMD), Samsung Electronics, as well as Taiwan Semiconductor Manufacturing Corporation (TSMC) and Nvidia.

Many customers consult with the Japanese company early in product development because the substrate (used to transmit signals from the semiconductor to the circuit board) needs to be customized to the characteristics of each chip. To be able to support the high temperatures of Nvidia's graphics processing units (Gpus), the substrate must be heat-resistant enough to successfully build AI chip packages that include components such as memory.